Hong Kong can be described as an international financial center, within which significant potential for entrepreneurship in terms of financial resources as well as in terms of a skilled workforce is concentrated. Company registration in Hong Kong offers the prospect for successful entrepreneurship within the region and abroad. Prifinance lawyers register legal entities in Hong Kong, including on behalf of shareholders, residents, and involving nominee directors, open bank accounts, and also have experience in supporting transactions within the region and abroad. Businessmen who are interested in “To buy a company in Hong Kong” should first of all pay attention to the advantages that the region provides to investors.
If you are going to buy a company in Hong Kong or register a new company in your name, the business solution will make the following advantages obtainable:
- impeccable reputation and good positions in the OECD rating
- zero taxation of capital gains, dividends, as well as VAT on operations that are carried out abroad after the company registration;
- simple registration – to open a company in Hong Kong the physical presence of the owners is not required;
- the absence of currency control;
- the possibility of acquiring vessels for cargo transportation and access to routes for the goods transportation with a relatively low cost;
- the option of registering a company ensures the confidentiality of personal data of the beneficiaries, even if nominee directors are involved;
- bank accounts can be opened in any jurisdiction after opening a company in Hong Kong.
Prifinance lawyers can evaluate the profitability of registering a business in Hong Kong option in your particular case, as well as calculate the preliminary cost of the option after providing input data. Address the request “registration of a company in Hong Kong cost and conditions” to the lawyers of Prifinance for a detailed calculation and action plan.
If your goal in the short term is “ To buy a company or open a new one in Hong Kong”, you should be aware of such forms of legal entities that foreign entrepreneurs choose:
- Private Company Limited by Shares – a body corporate where shareholders don’t bear any liability in excess of the value of their contributions, including unpaid. The number of shareholders, in this case, may be between 1 and 50. The constituent documents of a legal entity fix restrictions on the transfer and acquisition of shares by third parties. If you are going to open a company in this form, then consider the cases of such restrictions.
- Public Company Limited by Shares – a corporate entity that is legally separated from its founders who bear the limited liability for the outcomes of the entity’s operation. The liability of the owners and shareholders does not exceed the unpaid amounts of the value of the shares held. Under any conditions, the owners and shareholders do not risk losing more than the number of funds invested in shares. Registration of a company in this form gives the possibility of having more than 50 shareholders. The cost of implementing this option is significantly higher than in the case of a private limited company.
- Branch – a variant of running a business by a non-resident company, which allows you to conduct identical activities as in the country of primary incorporation. The registration of a branch office may be refused if the commercial name of a non-resident company is identical to the name of a legal entity that is registered in Hong Kong.
If you are going to buy or open a new legal entity in Hong Kong, Prifinance lawyers will help you choose the right form of running a business based on the formulated business priorities, as well as calculate the cost of implementing the option.
Opening a company in Hong Kong involves the following steps:
- Determination of business priorities that you intend to implement through a Hong Kong legal entity with the preparation of a business plan.
- Selection of a suitable organizational and legal form for the future legal entity (depends on the nature and volume of the proposed operations that are planned to be carried out through the legal entity).
- Formulation, verification, and reservation of a commercial name for a local legal entity.
- Collection of the required data about the owners, beneficiaries, and managers. For individuals, among other things, you will need to collect passport data, information about the place of residence, resume; for legal entities – information on registration and current status of the legal entity, constituent documents, information on official representatives, and corporate structure.
- Search and registration of an official legal address for a legal entity.
- Drawing up constituent and registration documents.
- Formation of capital for a legal entity with the provision of evidence of the legal origin of funds for such capital.
- Submission of a package of documents for registration. Receiving confirmation in case of approval.
- Registration for the purposes of hiring employees and pay taxes.
- Opening a corporate bank account.
- Issuance of a license and registration for the implementation of certain regulated types of business activities.
The above presents an exemplary procedure for the incorporation of a local legal entity. Every business case always has features that need to be considered along with the nuances of local legislation. Prifinance lawyers will be happy to develop concrete solutions and a plan for establishing a business in the region.
Legislation and Regulatory Environment
Buying or opening a company in Hong Kong gives excellent opportunities for rapid business growth. The business climate is adapted to the needs of entrepreneurs, which annually attracts the attention of foreign investors to the jurisdiction. Financial, holding, service, and industrial enterprises can be established here. Transparent legislation, loyalty to non-residents, relatively low cost of buying and opening a legal entity encourage foreigners to open a business in Hong Kong.
Registering a new business also requires obtaining a business registration certificate. It must be renewed annually (approximately 1 month before the previous certificate expires). The facility must also have one Designated Representative responsible for reporting to local regulatory authorities.
A private limited company should have at least one director with no limit on the maximum number of directors. A director may be an individual of any nationality who has reached the age of 18. A secretary is also required for record-keeping and compliance. The functions of a company secretary can be performed by both an individual and a legal entity, which must be a resident of Hong Kong. Information about the directors, shareholders, and secretaries of the company is public.
Opening an account for a local legal entity might prove difficult. Local banks carefully check people who intend to open accounts, especially people from the CIS countries. Prifinance lawyers have developed solutions on this issue: the services of local nominee directors, as well as the possibility of registering an enterprise with the involvement of local nominee shareholders. There is a possibility of using their services both for registering an enterprise and for opening a bank account.
While considering an option of buying or opening a company in Hong Kong, these tax highlights also should be taken into account:
- Corporate income tax rates – (i) 8.25% is applied to the first HKD 2,000,000 and (ii) 16.5% is applied to the remainder of the raised profits.
- Personal income tax rate – may vary from 2% to 17%
- Value-added tax – not applicable (N/A)
- Withholding tax rates – (i) dividends – 0% (ii) interests – 0% (iii) royalties – from 2.475% to 4.95%
- Capital gains tax – (i) corporate – N/A (ii) personal – N/A
Prifinance lawyers are ready to consult in more detail on the calculation and payment of taxes in your particular case after providing input data. Please provide input data to assess the profitability of the option of the company registering in Hong Kong.
How Prifinance Specialists May Help You
Prifinance offers a full range of legal services to businessmen who want to start or buy a company in Hong Kong, including the search for nominee directors. Lawyers take into account the specifics of the business, calculate the cost of buying legal entities and registering new ones, offering the best option. Lawyers accompany the procedure for opening accounts in banks loyal to the jurisdiction. The choice of organizational and legal forms, the collection of data, the preparation and execution of documents, negotiating with local advisers and government agencies – and this is not a complete list of Prifinance services. Moreover, lawyers carefully monitor possible political changes in the region and will be happy to advise in more detail on all the features of doing local business that may affect your case, as well as offer alternative options for it.